Services Engineering and Management Summer School, Helsinki University of Technology, August 28-September 2

This digest was created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. The content should not be viewed as an official transcript of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. The digest has been made available for purposes of scholarship, posted on the Coevolving Innovations web site by David Ing.

Marja Toivonen, Helsinki University of Technology

Marja may have done the first dissertation on Knowledge Intensive Business Services

Everyone from the KIBS research group is here

4 person group, 3 working on Ph.D.s

Tiina Tuominen

Anssi Smedlund

Saara Brax has mostly moved over

Work in the knowledge management institute, one of the 11 centres in Tuta

Agenda

KIBS project has been running 1.5 years, and still has one year to run

What are knowledge intensive business services?

KIBS is used in the context of firms

Expert firms

Could be used at the product level

They're business services, B2B, not B2C

Knowledge intensive has 3 descriptions by researchers:

Knowledge intensity is both the input and output of the activity

KIBS have been seen as problem solvers

Most important, and the meaning used here is interaction between KIBS and clients creates new knowledge

Many other processes are learning processes, e.g. in health care, but in KIBS, the learning process is central and created by the firm and client jointl

Also some pioneering researchers interested not just in growth, but the role of them

Impacts on productivity on other firms

This issue came more and more in studies, and analyzed in terms of innovation

At the end of the 1980s, more growth in the role of innovation in the economy

Other kinds of studies emerged, focused on the role in innovation

Not on all business services, but on expert roles

Industrial cleaning is not include

1995, KIBS was first defined by Ian Miles

The role of KIBS in innovation

KIBS must have a role in innovation, because they're experts, keep at leading edge, otherwise they don't have a business

KIBS have different attitudes:

They're sources of innovations, and have to be innovative themselves

They're facilitators of innovation processes within firms

If we look at the whole economy, KIBS are carriers of innovation, as the accumulate information and know more at the next client

As brokers, bridging intermediaries, they bring together different clients that can use each others' knowledge

At the broad level, they're orchestrators of innovators' networks

(A hard but reasonable argument), KIBS form the second knowledge infrastructure of society (with universities being the first), and as more practical

It's important to study KIBS in innovation, and innovation in KIBS

Processes are facilited by KIBS

Not many empirical studies on the role of KIBS

In the Netherlands, Cox 2002 asked about the role of outsourcing

Some say it's must moving an activity from a manufacturing company to an external firm

Cox showed that when companies outsources, business doesn't remain the same, so there's service upgrading

In Finland, Lith 2005 have centres of expertise programs, where new emerging technologies are put in various regions

In Helsinki, micro systems, biotech

Made a KIBS study, interviewed companies in these new areas, asking to what extent they used KIBS in their innovation activities.

One in three used a KIBS

Most were start up companies, lacked resources

Still could recognize the role of KIBS

The role of KIBS as sources of innovation has been found in Eurostat surveys (carried out every 3 years, 2004)

Every time the role of KIBS as innovators has come out

64% of technology-based KIBS carried out some innovation activity

Have also carried out on non-technology-based

What are the concrete way in which KIBS support their clients? Miles lists 6 ways

(1) KIBS provide expert knowledge.

Traditional way professionals have worked for decades.

(2) Carrying experience from one setting to another, e.g. from one sector to another

(3) Benchmarking, identifying concrete best practices

(4) Brokering, putting people together

(5) Diagnosis and problem clarification, as clients can't articulate

Important converters of tacit knowledge to explicit, and explicit knowledge to tacit

(6) Acting as a change agent, if the company knows what is wrong but doesn't have the power to change

KIBSINET:

Anssi at network level

Tiina at the level of the firm

Saara and individual innovations and processes

Will speak to the level of individuals, and individual processes, where have the most amount of data currently available.

Three theoretical approaches to service innovation

(1) The linear NSD New Service Development process

From idea, through development, to pilot and testing and markets

Well-established model of New Product Development, applied for decade

Have developed a similar model in services

This has much to do with the marketing school, e.g. Garney and Hooper

Ideal is that we have a formal innovation process with clear stages and checkpoints

In the newer models, because clients orientation is important, and client input has been created, can't say the NSD only describes the inside of the innovating company

Its strength is that it's the only model where the proceeding of the service development process has been studies at a detailed level.

Weakness: service is a black box

Service is just something developed

Theoretical definition of service innovation is ad hoc

(2) The Nordic school of service marketing, main representative is Edvardsson in Sweden

Very client-oriented

Service only exists in the presence of a client

Diagram: the service model framework by Edvardsson as in Tuominen 2004, including text into diagram

Three prerequisites:

Service concept: includes the main idea in which the service fulfills the needs of the client, connected to market properties

Service system: the resources used in the service, human and technological

Service process: the stages of the process, as well as the role and provider

From the prerequisites comes out the real experience: output and process, both of which have quality

This is the best to date service model, but not sure all of the elements are the right ones

Not many models at the detailed level, service specific as separate from goods

Problematic: the innovation process is not discussed, or very superficially, with no linkage to innovation

(3) The Lille school in France, Gallouj

Starting point is the modelling of the service, starting from the model of the good

In the good, have production characteristics, technical characteristics, and the benefits to the client

Then develop something for services

Services a final characteristics, technology characteristics, and competence characteristics

What's different?

In services, the production characteristics and technical characters can't be separated

Generally the product and process are one and the same

Then tries to define service characteristics

If everything changes, and nothing common to earlier services, call it radical innovation

Improvement innovation means something one of these three elements has changed

Innovation by addition: some new element introducted

Recombinative (architectural) innovation

Formalizatoin innovation: clarification

Gallouj also lists ad hoc innovation, meaning innovation is not planned a priori, but the service provider provides the service in practice, and gradually discover that innovation has been made a posteriori

Gallouj provides categorization for different types of incremental innovation

But compared to Edvardsson, not much detail, everything is included

Need a model where can locate the locus of innovation

Services are systems

The point at which the innovation in services begin, changes everything around it, yet it's still important to see everything around in advance

In addition, the categories describes many thing

Radical innovation doesn't belong on the list, it's a different dimension, how radical or incremental

Summary:

NSD is the only model that provides proceeding

Nordic school provides a good start to model

Lille school provides categorization of types of service

In our project, try to use them all

In our project, have found Schumpeterian definition was much broader than the approaches after him, where the linear ideas came out